One of the books I’m reading deals with the issue that we were talking about on this blog yesterday (“Thrifty with facts”). “The Price of Everything” by Eduardo Porter is an interesting study into the “true cost of living” and attempts to give an interesting perspective on otherwise mundane facts. My original post had been triggered by the fact that Maltastar deemed it fit to compare average wages in Luxembourg and Malta ostensibly because the evident gap would mean that the Maltese and only the Maltese have it worse off all round.
One of Porter’s chapters deals with how firms selling goods operate on the market in such a manner as to obviate the possibilities of the consumer to purchase comparatively. In other words, firms will go through great lengths to ensure that the consumer is not in a position to compare the price of their products with those of their competitors. We see this when a price is camouflaged under a pile of add-ons, bonuses, offers etc. Another of Porter’s interesting observations is that different brackets of the population have different shopping habits for different reasons. High wage earners give less value to the time spent comparing prices and tend to shop off the cuff while low wage earners are prepared to invest time in order to get the bargain.
Studies (I know that vague term is ugly but give it a chance) have shown that the same product might sell for very different prices depending on the customer involved. I do not need to believe some obscure study. SATURN, an electronics goods operating in Luxembourg has proven to be quite a good example of this practice over the past few months. I have noticed that anything from headphones to in-car hands-free sets can vary in price depending on whether you opt to shop at Saturn in the city-centre (Gare area) or whether you drive to Esch-Belval (20 minutes highway).
It’s not just electronic goods either. Malta has now got Lidl as a household name. Luxembourg too has its different tiers – from ALDI (think lidl but cheaper – yes, cheaper) to Delhaize via Cora, Cactus and Auchan (that’s Pavi in Malta) you would have to command a panoply of comparative programs in order to get your really thrifty shopping list.
Am I making a point here? Well yes. It might be worth reflecting that when we speak of Malta’s consumers we are not talking of one homogenous block. Times may have changed from when Mintoff’s budget was eagerly awaited in order to know the going rate for the next year for a can of sardines but that does not mean that consumers are not still a varied bunch that are daily tackling the traps and offers of a myriad of shopping establishments.
One instant in the movie the Iron Lady struck me (or was it “The Road to Finchley”). Thatcher knew the price of butter in the stores (she was after all a grocer’s daughter) but her fellow politicians did not. I wonder whether some intrepid reporter could cold question Lawrence Gonzi and Joseph Muscat and find out whether they know the going rate for a carton of milk or butter (even if it’s the fake kind). Before our politicians can fan the flames of discontent with regard to the cost of living they would do well to show a little more understanding of the situation.
Is there open competition in Malta? Are your Pavi’s and Arkadia’s and Smart’s providing a range of prices that might be beneficial to the consumer? That too must be taken into account. Before we look outside our shores and focus on how much money is ending up in other people’s pockets it would be interesting to know who is spending what and where with the money that ends up in our own.
Feedback is welcome. Meanwhile here is an excerpt from the Porter book.
According to a study of Denver shoppers families that make more than 70,000 dollars a year pay 5 per cent more for the same set of goods than families making less than 30,000 dollars. Singles without children pay 10 per cent less than families with five members or more. Families headed by people in their early forties pay up to 8 per cent more than those in their early twenties or late sixties. Retirees are much more careful shoppers than middle-aged people. They search dutifully for the best deal and end up paying nearly the same amount for the same product. People in middle-age, by contrast, buy more carelessly. The prices they pay are all over the map.
